If you notice fewer shoppers at the mall, fewer buyers on the car lot, fewer patrons at restaurants and fewer movie goers in coming days and months, don't be surprised.
Simply put, consumers may feel less inclined to spend money. Economists were surprised by the latest consumer survey.
Confidence among American consumers unexpectedly slumped in March, which may signal a cooling in spending, the biggest part of the economy.
The Thomson Reuters/University of Michigan preliminary sentiment index for March fell to 71.8, the lowest level since December 2011, from 77.6 in February. The gauge was projected to increase to 78, according to the median estimate of 67 economists surveyed by Bloomberg.
Bloomberg, March 15
To put the survey in context: During the 18-month severe economic downturn that ended in June 2009, the average index number was 64.2. In the five years before the worst of the financial crisis, the consumer index averaged 89.
So after nearly four years of an economic "recovery," the 71.8 figure for March is just 7.6 points higher than the average number during the depths of the financial crisis.
A consumer survey conducted by Yum! Brands Inc. (KFC, Taco Bell and Pizza Hut) apparently confirms a coming reluctance to spend. The CEO of the company said "their research indicates consumers remain uneasy," according to the Bloomberg article.
Earlier data from the Rasmussen poll (March 1-2) suggests that the Michigan survey was no surprise.
Few Americans believe the economy will be much better in a year, a Rasmussen survey shows.
It’s a mood that hearkens back to the days of President Jimmy Carter days; only 25 percent of Americans responding to the poll see economic improvement over the next 12 months. The deeper significance, Rasmussen says: U.S. short-term confidence now matches long-term confidence. And they’re both at new lows, Rasmussen reports.
Washington Times, March 5
Here's what else this latest consumer sentiment data may suggest.
The psychological aspect of deflation and depression cannot be overstated. When the social mood trend changes from optimism to pessimism, creditors, debtors, producers and consumers change their primary orientation from expansion to conservation.
Conquer the Crash, second edition, p. 91
And it now appears that the primary orientation of consumers is that of conservation.